Big Pharma Undercut Its Own False Claims About Innovation in 2025





 



Dose of Reality: Breaking Down Big Pharma’s Year of Bad Behavior in 2025: Part
IV: Big Pharma’s Debunked Innovation Rhetoric

Big Pharma Undercut Its Own False Claims About Innovation in 2025



With each new year comes a time-honored tradition for Big Pharma: Hiking
prices on hundreds of brand name prescription drugs in the first weeks of
January. A good time to review Big Pharma’s year of bad behavior.



This year, Big Pharma continued to double down on debunked claims about
innovation to undermine market-based solutions that would lower drug prices for
American patients.



In the first installment of our year-end series, we reviewed Big Pharma’s
egregious pricing practices in 2025, including continuing to hike prices faster
than the rate of inflation and bringing new drugs to market with skyrocketing
launch prices.



In the second installment of our series, we looked at the impact of Big
Pharma’s aggressive marketing tactics and staggering spending on
direct-to-consumer (DTC) advertising.



In the third installment, we explored new data from 2025 on the staggering
cost of Big Pharma’s anti-competitive tactics, including abuse of the U.S.
patent system.



In our last installment of this series (before Big Pharma starts hiking prices
anew in 2026), we’ll recap how the pharmaceutical industry debunked its own
rhetoric on innovation in 2025:



PhRMA REDUXES SAME DEBUNKED ARGUMENTS ON INNOVATION



Big Pharma’s Innovation Rhetoric Designed to Keep Drug Prices High Rather Than
Unlock True Breakthroughs for Patients



In February, Big Pharma’s principal trade group, the Pharmaceutical Research
and Manufacturers of America (PhRMA), released areport
<[link removed]>
rehashing the same tired and debunked arguments on innovation that brand name
drug companies have hidden behind as an excuse to keep drug prices high for
years.



Big Pharma routinely asserts research and development (R&D) costs justify
out-of-control prescription drug prices and claim solutions to lower drug
prices would threaten innovation into new breakthroughs. These arguments simply
don’t hold up to the facts — and are part of a Big Pharma strategy to maintain
the status quo where they can focus on gaming the system to block competition
and keep drug prices high, rather than on true innovation.



Multiple studies have found Big Pharma’s price hikes have very little
connection to the cost of its development or improvements in drugs’ efficacy.
In other words, brand name drug companies set the prices of their products, and
hike prices, to maximize their profits — not because there is any true
connection to innovation.

* “No Association” Between Drug Company’s Prices and Investments In Research
& Development.A September 2022 paper in The Journal of American Medical
Association (JAMA) Network Open examined a subset of 63 drugs approved by the
U.S. Food and Drug Administration (FDA) between 2009 to 2018, representing
around one-fifth of the drugs approved by the FDA during this time span. The
researchers found that for this subset of drugs, “there was no association
between estimated research and development investments and treatment costs
based on list prices at the launch of the product or based on net prices a year
after launch.” (“Association of Research and Development Investments With
Treatment Costs for New Drugs Approved From 2009 to 2018,”JAMA Network Open
<[link removed]>,
September 26, 2022)


* No “Meaningful Association Between Cancer Drug Prices And The Magnitude Of
Benefit For Any End Points.”An October 2022 study in JAMA Internal Medicine
found a lack of correlation between the prices set by Big Pharma on cancer
drugs and their effectiveness for patients. “We did not detect a meaningful
association between cancer drug prices and the magnitude of benefit for any of
the end points,” the researchers wrote. “This suggests that cancer drugs are
priced based predominantly on what the market will bear.” In other words, Big
Pharma sets prices to maximize profits, not based on clinical value or outcomes
for patients. (“Association Between US Drug Price and Measures of Efficacy for
Oncology Drugs Approved by the US Food and Drug Administration From 2015 to
2020,”JAMA Internal Medicine
<[link removed]>,
October 31, 2022)
Big Pharma also benefits from U.S. taxpayers carrying a substantial share of
the load for R&D research intro true breakthroughs:

* “The U.S. Taxpayer Has Funded Research For Every Single One Of The 210 New
Drugs That The FDA Approved Between 2010-16,” noted economist Mariana Mazzucato
in a 2018 column forThe Washington Post
<[link removed]>
. “Yet the companies that have access to this research are increasingly viewing
pharmaceuticals in the same way that banks view their financial product —
opportunities for short-term returns.”
Big Pharma’s report opened with a letter from PhRMA’s President and CEO
Stephen J. Ubl and Gilead Chairman and CEO Daniel O’Day, who jointly tout,
among other things, the alleged success of the pharmaceutical industry’s
medical innovation over the past 25 years. One such example the executives cite
is the progress in HIV treatments, stating, “We’ve…helped turn HIV/AIDS into a
manageable condition.”



What they failed to mention is that Gilead itself delayed patient access to
innovation that would have supported better health outcomes. In a particularly
egregious case study in the Big Pharma practice known as “product hopping,”
Gileadpurposely delayed
<[link removed]>
the market entry of a less toxic version of their HIV treatment so that they
could run out a longer period of monopoly on their existing treatments, then
establish maximum exclusivity on the safer treatment — to boost profits at the
expense of leaving patients waiting for the improved treatment option.



BIG PHARMA’S RHETORIC OF DEFLECTION DOESN’T ADDRESS CAUSE OF HIGH PRESCRIPTION
DRUG PRICES



PhRMA Continues to Dodge Responsibility for Egregious Pricing Practices and
Anti-Competitive Tactics



In September, an opinion piece
<[link removed]>
published in The Washington Post from PhRMA President and CEO Steve Ubl was a
classic rerun of Big Pharma’s deflection playbook, filled with empty promises
and grand pledges meant to deflect responsibility and dodge accountability for
high prescription drug prices.



PhRMA, of course, does not acknowledge rapidly rising launch prices being set
by brand name manufacturers on new products, years of egregious and unjustified
price hikes outpacing inflation, especially on blockbuster medications, or the
litany of anti-competitive tactics deployed by Big Pharma to undermine
competition from more affordable generics and biosimilars.



Instead, PhRMA falls back on its usual finger-pointing at others in the drug
supply chain, with claims about the industry’s commitment to the American
people they continue to price-gouge thrown in.



The fact is that brand name drug companies continue to shelter profits
overseas to avoid paying U.S. taxes. As documented by a U.S. Senate Committee
on Financeinvestigation
<[link removed]>
in March, companies like Pfizer have perfected “round-tripping” tax avoidance
schemes, shifting profits from U.S. sales into foreign subsidiaries. This
accounting trick allows pharmaceutical companies to avoid paying billions in
federal income tax by treating sales to U.S. customers as foreign income. U.S.
Senator and Ranking Member Ron Wyden (D-OR) described Pfizer’s move as “what
could be the largest tax-dodging scheme in the history of Big Pharma.” Other
Big Pharma giants cited for similar practices include Merck, AbbVie and Amgen.



As policymakers return to Washington in 2026, they should take note of the
pharmaceutical industry’s continued egregious pricing practices and work to
advance bipartisan, market-based solutions to hold Big Pharma accountable.



Read our first blog in this series on Big Pharma’s egregious price hikes and
increasing launch pricesHERE
<[link removed]>
.



Read our second blog in this series on Big Pharma’s massive spending on
direct-to-consumer advertisingHERE
<[link removed]>
.



Read our third blog in this series on Big Pharma’s anti-competitive abuse of
the U.S. patent systemHERE
<[link removed]>
.



Learn more about market-based solutions to hold Big Pharma accountable and
lower prescription drug pricesHERE <[link removed]>.



And stay tuned for the start of Big Pharma’s annual tradition of welcoming the
new year with egregious price hikes on hundreds of brand name prescription
drugs.



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